Sorry, you need to enable JavaScript to visit this website.

AUD/USD Trading Strategy for the week 06-10 Jan 2014

You are here

AUD/USD Chart 06 Jan 2014
4.4/5 of 6 ratings

The Aussie is consolidating its losses, Friday's momentum to the upside fading

The Australian dollar is on the downside today with Friday's gains being put into question following HSBC's Chinese services PMI data that came out this morning at 50.9 - barely in expansionary territory. We are waiting for a break lower to buy puts for now.

We will focus on today's price action

Friday's price action in the pair was substantial with it rising very high, probing above 0.90. However Federal Reserve comments have boosted the US Dollar towards the end of the session and have resulted in a complete reversal of fortunes.

In terms of practicality we will focus on today's price action. A rebound from 0.8940 has stalled in the 0.8980's area and stagnated the pair into early US trading. The bottom has already been retested around 0.8935 but to no avail.

Our initial supposition is that the pair will keep consolidating until it tests lower levels around 0.8930. Should we see an hourly close below those we are planning to buy daily put options for tomorrow. More risky players can try to do the same for tonight.

The baseline scenario can be switched if we see the pair rallying and testing levels above 0.8980-5. While we don't see this as likely, there is no telling what the services ISM number from the US might be. It will be released at 15:00 GMT.

On the Australian data front we have the trade balance on Tuesday, which will be important if it deviates from the forecast by a big margin. The most important number for the week will be Retail Sales from Australia on Thursday and US Unemployment data on Friday.

For now we stay put, any break of mentioned levels to the upside and the downside will trigger some action on our part. Stay tuned to our strategy section for more news surrounding our weekly strategy for the AUD/USD binary options forex pair.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

You may also read